Is the salary I earn abroad taxable in Pakistan?

What does the law say?

Whether Pakistan taxes a salary earned abroad turns on two questions: where the salary comes from, and whether you are resident for the tax year.

Source. Section 101(1) of the Income Tax Ordinance, 2001 makes salary Pakistan-source income only to the extent it:

• is “received from any employment exercised in Pakistan, wherever paid”, or
• is paid by or on behalf of the Federal Government, a Provincial Government or a Local Government in Pakistan, wherever the employment is exercised.

Section 101(16) then says anything that is not Pakistan-source is foreign-source. Salary from a Dubai hospital for nursing work in Dubai is foreign-source.

Residence. Section 11(6) computes a non-resident’s income using only Pakistan-source amounts. Section 11(5) brings a resident’s foreign-source income in as well. Residence is decided under section 82: 183 days or more in Pakistan in the tax year, being posted abroad as federal or provincial government staff, or, for a citizen, not being present in any other country for more than 182 days or not being a resident taxpayer of any other country.

How do the pieces fit together?

Your position for the tax year	Salary for work done abroad
Non-resident, private or foreign employer	Foreign-source, not taken into account (section 11(6))
Non-resident, paid by a Pakistani government	Pakistan-source under section 101(1)(b)
Citizen who left Pakistan during the year and stayed abroad	Salary earned outside Pakistan in that year is exempt (section 51(2))
Resident, foreign income tax paid on the salary	Exempt under section 102(1)
Resident, no foreign income tax paid	Taken into account under section 11(5); section 102 does not help

Section 102(2) explains when foreign tax counts as paid: where the employer withheld it from the salary and paid it to the revenue authority of the country in which the employment was exercised.

Worked example (illustrative figures)

Zubair, an accountant from Faisalabad, worked for a Pakistani firm until he left for Riyadh on 1 September 2026. From then until 30 June 2027 he worked for a Saudi company and did not return to Pakistan.

1. Salary from 1 July to 31 August 2026. Rs. 180,000 a month from the Faisalabad firm, Rs. 360,000 in total. This was for employment exercised in Pakistan, so it is Pakistan-source under section 101(1)(a) and remains taxable in tax year 2027.
2. Salary from Riyadh, September 2026 to June 2027. He is a citizen who left Pakistan during tax year 2027 and remained abroad for the rest of that year, so section 51(2) exempts the salary he earned outside Pakistan during that year.
3. Residence check. Counting 1 July to 1 September 2026, he was in Pakistan for 63 days, below the 183 of section 82(a). Whether section 82(d) makes him resident depends on his days in Saudi Arabia and his tax status there. Section 51(2) does not depend on that answer, because its text contains no residence condition.
4. Tax year 2028. Section 51(2) covers only the year he left. From 1 July 2027, his Saudi salary is outside Pakistani tax if he is non-resident (section 11(6)), and if he were resident it would need section 102 or would be taken into account.

What if I move back to Pakistan?

Section 51(1) gives a separate exemption to a returning citizen. If you were not a resident individual in any of the four tax years before the year you become resident, your foreign-source income is exempt in that year and the following tax year. Our page on returning expatriates covers this.

What if my employer is Pakistani but I work abroad?

Section 101(1)(a) looks at where the employment is exercised, not who pays. Our separate page on remote work for a Pakistani employer covers how employer withholding interacts with that rule.

Common mistakes

• Assuming remittance makes salary taxable. The source rule in section 101(1)(a) applies “wherever paid”.
• Assuming a Pakistani passport makes foreign salary taxable. Citizenship matters only through section 82(d) and section 51, and a resident still has section 102.
• Forgetting the government salary rule. Salary paid by a Pakistani government is Pakistan-source under section 101(1)(b) wherever the work is done.
• Applying section 51(2) to the following year. It covers only the tax year in which you left Pakistan.

What to check in the official text

Read section 101(1) and (16), section 11(5) and (6), section 51 and section 102. Section 102 depends on “foreign income tax”, which rule 15 of the Income Tax Rules, 2002 defines. Tax treaties between Pakistan and other countries are outside this corpus.